Smart meters and water footprints: How to increase climate resilience in Mexico and Belize

Increasing climate variability and related extreme weather events are significantly adding to the vulnerabilities of households and businesses due to deteriorating water sustainability, especially in climate sensitive areas with either lowlands adjacent to the ocean or in urban areas with large populations. Businesses will have to improve their resilience to climate change to protect their value chains. Actions to address these vulnerabilities should begin by focusing more on resilience and adaptation than on mitigation. Water management, affected by climate change, could be both a risk and an opportunity to livelihoods and businesses.

The water footprint is an indicator that defines the total volume of fresh water used to produce goods and services of a company, or the volume consumed by an individual household. Mexico, and the city of Monterrey in Mexico has one of the highest water footprint in the region despite being in a semi-arid region where dry climate predominates, causing it to be highly vulnerable to water scarcity. The last drought event in 2011 lasted a full year and was considered the most severe of the last 50 years.

Belize is a low-lying coastal country that is vulnerable to a wide range of climate risks like cyclonic winds, coastal flooding and storm surge. These risks threaten business continuity, private and community property, livelihoods, critical infrastructure and water security. In August 2016 hurricane Earl caused widespread damage of infrastructure and destroyed 2,000 homes that housed over 10,000 residents. Annual losses in GDP due to climate risks are an estimated 3% over the last decade, making Belize the eighth most climate vulnerable nation in the world. Around 95% of total damages incurred by climate risks in urban areas are in the tourism and housing sectors.

PROADAPT will introduce a project in Belize to help increase private sector climate resilience through technical assistance at the enterprise level, while also providing assistance to local providers so that they may capitalize on the growing demand for products and services that help buyers to better manage exposure to flooding, sea level rise, cyclonic winds, heat waves etc. Similarly, a PROADAPT project in Mexico will reduce the water footprint of high water consuming companies in sectors such as textile and beverages, textile, paper and pulp. These companies will be asked to participate in a voluntary consumption reduction program implemented through the use of highly innovative smart meters and other new tools to promote the effective use of water. This will benefit the bottom lines of these companies and provide opportunities to local SMEs that can deliver relevant resilience products and services. The project is planning to partner with cutting edge institutions like Arizona State University, which has experience testing these innovations in Phoenix, Arizona.

Increasingly, new services and products will be in demand to help companies and public entities become more resilient to climate change and protect their assets. Companies with appropriate business models, knowledge and strategies will take advantage of a growing number of market opportunities as climate-related threats evolve. The reduction of the water footprint will stimulate the demand for new services of construction and repair of systems, risk management, services and products of measurement, drainage of the land, filters, auxiliary systems of capture, etc.

PROADAPT is a jointly financed program between the Nordic Development Fund and the IDB/MIF that invests in climate resilience, primarily focusing on the private sector and small and medium sized enterprises (SMEs). PROADAPT projects include small-scale farming in Sertao, Brazil; supporting the coffee sector in Central America; market integration in the Gran Chaco region of Argentina and Paraguay; and the tourism sector in the Caribbean. In the knowledge area PROADAPT is conducting a global study on the market for resilience products and services in the Philippines, South Africa and Colombia and is developing a climate resilience tool to assess risks and benefits in the portfolios of financial Institutions. PROADAPT has also developed a new M&E framework and toolkit as essential elements of the learning approach to the challenges of investments in climate resilience. The approach of PROADAPT is to have a strong understanding of the client's issues, problems, and decision processes. The M&E toolkit is designed to acquire deep knowledge and transform it into effective support to our clients and partners in their decision making processes. Most businesses are not experts in climate change and are just struggling to keep their businesses afloat after suffering from floods and other extreme weather events. The purpose of developing an M&E platform is to learn through of interaction and innovation across our team and with the PROADAPT and MIF experts.

The Multilateral Investment Fund is the innovation lab for the Inter-American Development Bank Group. It conducts high-risk experiments to test new models for engaging and inspiring the private sector to solve economic development problems in Latin America and the Caribbean. The MIF addresses poverty and vulnerability by focusing on emerging businesses and smallholder farmers with the capacity to grow and create economic opportunities.